Montenegro to pay over 4,5 million euros to KIPS

Montenegro should pay the KIPS company more than 4,5 million euros in material damages, the European Court of Human Rights in Strasbourg decided today.

The reason for the petition before the court in Strasbourg was the state's refusal to issue a building permit to KIPS for the construction of a shopping center.

In the judgment of June 26, 2018, the European Court found in the case of KIPS and Drekalović v. Montenegro a violation of the right to a trial within a reasonable time in relation to the duration of the administrative procedure (Art. 6 para. 1 ECHR), the right to an effective legal remedy (Art. 13 of the ECHR) but also the right to property protection (Article 1 of Protocol 1 of the ECHR).

The representative of Montenegro, Valentina Pavličić, announced today that, bearing in mind that the second shopping center of KIPS is based on the same plans, the European Court accepted that TC Cijevna was built instead of the planned shopping center at Stari Aerodrom.

"As TC Cijevna was opened at the end of 2007, which was not in dispute between the parties, the European Court, starting from the point of view of the main judgment and the arguments presented by the parties in the proceedings, determined that the first applicant suffered damage due to lost profits only for period of 2006 and 2007," she announced today.

Making a comparison between the area and location of the planned shopping center at Stari Aerodrom and the existing TC Cijevna, the judgment states that the European Court cannot speculate on which location the first applicant would make a higher profit, for which reasons it is as a starting point for the assessment of the lost profit that would realize the planned shopping center at the Stari Aerodrom, take the profit made by TC Cijevna.

"As in the submitted financial reports, the realized profit of TC Cijevna varied from year to year (e.g. for the first two years of operation, i.e. 2008 and 2009, it amounted to EUR 5,346,093.87 and EUR 2,177,714.71), the European Court considered it fair to take the average amount as assumed profit per year, i.e. the amount of EUR 2,267,797.60. As the first applicant suffered damages only for two years, i.e. 2006 and 2007, the European Court finally determined the total amount of damages suffered due to lost profit at 4,535,595.20 euros and obliged the state to pay the specified amount within 3 months of the verdict becoming final. When it comes to the requested material damage and the rest of the claim for compensation for lost profits, the European Court rejected them as unfounded," explained Pavličić's decision.

They demanded over 30 million euros from KIPS.